Lehigh Valley

Allentown School District prepares to vote on bond refinancing

Savings would be almost $600,000

ALLENTOWN, Pa. - Members of Allentown School Board’s committee-of-the-whole voted Thursday night to place a resolution concerning bond refinancing opportunities on the agenda for the board’s March 22 meeting. 

If passed, the resolution would grant permission to Public Financial Management to refinance two sets of the school district’s bonds, as well as one set of the district’s notes. The financial assets include:

  • Series A of 2010 Bonds with $15,905,000 principal currently outstanding
  • Series of 2011 Bonds with $2,975,000 principal currently outstanding
  • Series AA of 2011 Notes with $5,230,000 principal currently outstanding

Public Financial Management Managing Director Scott Shearer outlined to the board what the refinancing would entail.

“The main concept of this refinancing is we’re not stretching out the debt, we’re not shortening the debt, we’re basically just going from a higher rate to a lower rate, and that’s what’s achieving economic savings,” Shearer said. 

The call dates for the 2011 bonds and notes were on Feb. 1, 2018, and the call date for the 2010 bonds was Feb. 15, 2018. Shearer said that choosing to refinance so close to the call date would be beneficial to the district. 

“They basically just hit their call date, which is more or less the first time they’re able to be refinanced, so that just occurred, so we’re at an opportune time to consider the refunding,” he said. “We’re looking at net savings of a little over $590,000. The key point there is that is net of issuance cost and that is net of the state’s share of the savings.”  

“What we’re showing you again is the true net benefit to the district,” Shearer said.

Shearer said that the savings would benefit the district due to the amount of capital projects they have planned. 

“It just so happens you have a fair amount of capital projects and I think this money will come in handy to be utilized for those purposes,” he said.

The board voted unanimously to place the resolution on the agenda for their next regular board meeting.

The district’s finance committee also put the issuance of a Series A of 2018 Bond on the agenda for March 22. The maximum principal aggregate amount of that bond is $25,000,000.

Other Business

During the building committee meeting, the board voted to place a motion on their next agenda to award the bid for replacement of a facade at William Allen High School to J.P.S. Construction Company of Glenside, Pa. The services will cost the district $309,000 to have the facade replaced, which was the lowest offer of four bid packages the board received.

Board member Robert E. Smith Jr. said that he thought the price was still expensive, even if it was the lowest bid. 

“That’s a pretty expensive facade,” Smith Jr. said.

Board member Lisa Conover asked the district’s director of facilities services, Thomas Smith, if there were any ways the district could explore options to save money on the facade. Smith said he didn’t have an answer, and that the facade replacement is crucial for the well-being of those both inside and outside the building.

“This particular project is an emergency repair. The inside of the building is falling off,” he said. 

If passed, work on the facade is scheduled to begin and be completed this summer. Smith said that the bond refinancing, if passed at the board’s next meeting, could help to pay for such improvements.

“A lot of this capital improvement work will be paid in part by the bond refinance,” he said.

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